Aluminum and renewable energy company Hydro and power cable solutions provider NKT have signed a landmark long-term agreement for the supply of aluminum wire rod, valued at approximately €1 billion.

A press release said that the deal guarantees a stable supply of low-carbon aluminum from Hydro for NKT, which plans to ramp up production to meet surging demand for medium and high voltage power cables across Europe. The agreement calls for Hydro to supply NKT with an estimated 274,000 metric tons of aluminum wire rod from 2026 through 2033, with an option for additional volumes. The total quantity covered by the contract is enough to manufacture medium-voltage cables that could circle the globe nine times or stretch the entire distance to the moon, about 363,000 km.

The new deal builds on a more than 40-year partnership between the two companies and extends their existing contract for 2025. The agreement is seen as a critical step in supporting Europe’s efforts to modernize its aging grid infrastructure.

The agreement secures NKT access to Hydro’s REDUXA 4.0 primary aluminum, produced in Norway with renewable energy. It has a documented carbon footprint of 4 kg CO2e per kilo aluminum or less, about a quarter of the world industry average.

NKT President and CEO Claes Westerlind said that securing the long-term is important for the company to deliver on the growing demand for power cables as Europe accelerates its energy transition. “Our partnership with Hydro will help us ensure reliable deliveries to our customers and support the continent’s climate ambitions.”

“It is with a sense of urgency that Europe is now mobilizing to reduce dependency on fossil fuel imports, introduce more homegrown, renewable power, and ensure security of supply of critical raw materials,” said Hydro CEO and President Eivind Kallevik.